Getting to Scale in Housing Microfinance: A Study of ACCION Partners in Latin America

This issue of InSight presents the results of a study on Housing Microfinance (HMF that ACCION International, Habitat for Humanity International and Cities Alliances jointly conducted in order to better understand the potential for scale in HMF. The study:

• Covered ten of ACCION Internationals partners in Latin America;
• Aimed to understand the key success factors as well as challenges and barriers for reaching scale in housing;
• Examined the performance of housing portfolios including: outreach, volume, growth and their share in total microfinance portfolio;
• Considered supply-side factors that facilitate/ limit the scaling up of HMF.

The study:

• Describes the characteristics of HMF;
• Compares HMF with other loan products, such as mortgages loans and working capital loans;
• Outlines the perceptions of microfinance institution (MFI) managers regarding HMF success factors and barriers to scale in the areas of:
  • Customer demand;
  • Use of HMF loans;
  • Market segmentation;
  • Financial performance;
  • Reporting systems;
  • Buy-in by field staff;
  • Regulatory framework;
  • Funding.

The brief recommends that MFIs:

• Consider HMF a core product;
• Increase the scope of HMF to include new market segments;
• Understand the housing needs of their clients;
• Make HMF products attractive to their branch personnel.

The brief concludes by stating that the scale challenge is not just a matter of increasing the share of HMF within institutional portfolios, but it also depends on the growth of the microfinance industry as a whole.